Case Details: In re: Dynamic Techno Medicals Pvt. Ltd. (2025) 35 Centax 296 (A.A.R. - GST - Ker.)
Judiciary and Counsel Details
- S/Shri Jomy Jacob & Mansur M.I., Members
- Shri Stanly James, CA, for the Appellant.
Facts of the Case
The applicant, engaged in the manufacture and marketing of various health aid products, appointed Product Specialists and provided them with fixed demo sets of its products for field demonstrations and marketing display. These demo sets, specific to each sales division, were used to showcase the functional efficacy and features of the products to prospective customers. The applicant submitted that such demo goods were never sold or distributed to third parties and remained the property of the company. After extensive use, these goods became worn out and were returned to the factory for scrapping on payment of applicable GST. The applicant sought an advance ruling on whether the issuance of such demo goods constituted a disposal of goods akin to ‘Physicians’ Samples – Not for Sale’. The matter was accordingly placed before the Authority for Advance Ruling (AAR).
AAR Held
The AAR held that demo products issued to Product Specialists were not permanently transferred or gifted but were provided solely for demonstration purposes, with ownership retained by the applicant. The Product Specialists merely acted as custodians or agents of the company. Consequently, there was no disposal or transfer of title at the time of issuance, and such demo goods could not be equated with physicians’ samples either factually or legally. The AAR observed that a ‘supply’ under Section 7 of the CGST Act and the Kerala GST Act would occur only when the goods were ultimately scrapped and cleared on payment of tax. Therefore, issuance of demo units did not amount to a disposal of goods and could not be treated on par with the distribution of ‘Physicians’ Samples- Not for Sale’.
List of Circulars Cited
- Circular No. 92/11/2019-GST [F.NO. 20/16/04/2018-GST], Dated 07-03-2019
